Section 5 is opened, in subsection A, with a general declaration that the Ministry of Agriculture will act to cancel production quotas for all crops, except for potatoes. Subsections B, C and D deal with the general compensation arrangement that will apply to all industries, except the potato industry. They are not needed for our purposes, except for one matter, which we will return to later. The method of compensation for potato growers – which we are dealing with – was excluded from the general arrangement, and was uniquely determined in subsection F.
Section 5(f)(1) establishes, as Justice A. Matza showed in the previous hearing, a two-stage compensation mechanism. The first stage is defined in the preamble of the section: "The cancellation of quotas on potatoes will be done gradually in accordance with the autonomy agreements. In each of the next three years, the Ministry of Finance will fund compensation for the cancellation of quotas according to the amount coming in from the actual autonomy..." Subsection 4 further states in this regard that "the compensation to Potato Potatoes shall be paid at the end of each compensation year and against quantities that have actually entered and no more than the trade quota" (my emphases – E.R.). The amount of compensation was defined in subsection 3, according to which "the total grant will be NIS 1,700 per dunam of potatoes". The first stage relates to the years 1995-1997. During these years, according to the contract, production quotas will be gradually lifted, and potato growers will be compensated, every year, according to the amount that comes in from the actual autonomy. The compensation each year will be blocked at the amount of the quota, the value of which was set at NIS 1,700 for each dunam of field. The method of compensation in the first stage is not controversial.
- The second stage of compensation – the axis of dispute between the Petitioners and the Respondent – is defined at the end of the section, which begins with the box "and the rest": "In each of the next three years, the Ministry of Finance will fund compensation for the cancellation of quotas according to the amount received from the actual autonomy and the rest (up to the full amount of the quotas), with the complete cancellation of the quotas" (my emphasis – E.R.). The second stage refers to the fourth year. This year, according to the agreement, production quotas will be completely abolished. The Respondent's argument is that even in the fourth year, the payment – that last payment – is contingent on the actual extent of the import, i.e., without the actual entry of potatoes into Israel, no compensation will be paid. Is this meaning also embodied in section 5(f)(1) in its literal sense? In my opinion, the answer to this is in the affirmative. It is certainly reasonable in my opinion to say that the box "according to the amount received from the actual autonomy" also refers to the end of section 5(f)(1), which reads: "In each of the next three years, the Ministry of Finance will fund compensation for the cancellation of quotas according to the amount that comes in from the actual autonomy and the rest (up to the full amount of the quotas [and subject to the amount that comes in from the actual autonomy]), with the complete cancellation of the quotas." This reading of the section, which sees the box in the strait – "according to the amount of actual autonomy" – as spilling over to the left and right, to the beginning and the end, is reasonable in my opinion. This understanding is supported verbally, as my colleague the President showed in the judgment that is the subject of the petition, also by the very use of the word "compensation" as opposed to "support" or "grant" – words that are also used in the agreement. Indeed, due to the wording of clause 5(f)(1) of the contract, the petitioners sought to interpret it in a different way from the intuitive meaning attributed to it by the respondent. Even if there is a basis for the argument that reading the section in the way of the petitioners is possible, the words of the section certainly interpret a range of meanings that contains both meanings, in such a way that it cannot be said, under any circumstances, that its "language is clear". Is there anything in the other clauses of the contract to contradict this determination?
- Let us continue to look at section 5(f) in its entirety. Subsection (4) states that "the compensation to Potato Corps will be paid at the end of each compensation year and against quantities that actually entered and no more than the trade quota". I believed, and still believe, that subsection (4) is intended to emphasize the rule – compensation for actual deduction – and that this rule applies to the two stages of the compensation mechanism. Therefore, in my opinion, subsection (4) tipped the scales in the direction of the respondent's argument. However, my colleague the Vice-President found that the use of the words "trade quota" indicates that subsection (4) applies only to the first stage of compensation, since it relates, in his view, to import quotas as opposed to growth quotas. I will note that this is the only instance of the phrase "trade quota" in the agreement and it is not explicitly stated in it. Throughout the vast majority of the contract, the phrase "quota" or "quotas" was used, and once the phrase "production quota" was used. In any event, subsection (4) does not close the door on the argument of any of the parties, as the Vice-President Matza believed, and in no way should we accept the determination that "the language of the contract of the contract unequivocally supports the position of the appellants [the petitioners herein] and cannot bear the position of the State at all".
- So far, we have examined the language of the contract. However, the work of the commentator is not the work of linguistics. "In the interpretation of a contract we do not occupy ourselves with purely linguistic research, and we knew that the interpretation directs itself to the intentions of the parties" (Civil Appeal 5795/90 Skelly v. Doran, IsrSC 46(5) 811, 818). In examining the intentions of the parties to the contract, the judge does not examine what is in the heart. It attempts to locate the common subjective desire of the parties when they entered into the contract between them, as reflected in the "story" they tell, from its beginning at the negotiation stage and the background that preceded it to its end (Civil Appeal 4541/91 Lubyanker v. Minister of Finance, IsrSC 48(3) 397, 407-408; Barak in his book Purposive Interpretation in the aforementioned Law , at p. 388; C . Shalev Contract Law – The General Part (2005) 416-417). This is required by the principle of good faith. Indeed, the written contract is an important – sometimes the most important – chapter in the story. However, the judge cannot suffice with examining the words of the contract. As my colleague, Justice Cheshin (as he was then called), noted:
In examining the intentions of the parties to a written contract, our first stop is in the same letter that the parties agreed upon and created, but this is not the last stop in our journey to discover their common intention. Intention, common intention, intentions – which are the area of our inquiry in the interpretation of a contract – are all abstract concepts that are not tactile... Since we aspire to clarify the scope and scope of the interpretation of that abstract concept – the intentions of the parties – we cannot limit ourselves only to the literal interpretation of the contract ( the Skelly case, supra, at p. 818).
- There is a connection between the circumstances surrounding the contract and the written contract. Indeed, "the boundary line between the 'contract' and the 'circumstances' of the drafting of the 'contract' may be the thinnest of the contract, and the fields are sucked from each other" (Skelly, supra, at pp. 817-818). Usually, it is not possible to give meaning to words without knowing in what context and under what circumstances they were written. Words and sentences take on different meanings in different contexts (see: Y. Sussman, "A Few for Reasons of Interpretation," Jubilee Book of Pinchas Rosen (1962) 147). Justice Matza also held in the Apropim case that the context in which the contract was written should be referred to in order to interpret it:
As a rule, in my opinion, it is correct to assume that the way of human beings is to be meticulous and meticulous in the formulation of their contractual agreements. And the written word, where its meaning is clear and its probable intention is consistent with the subject of the engagement, is still, it seems, the most reliable source for the intentions of the communicators... (Interest Apropim , above, at p. 285; my emphasis – E.R.).